THE CONSERVATIVE INTELLECTUAL REVIVAL

A conservative intellectual revival in the 1950s provided the springboard for the reinvigoration of the Republican party in Twentieth Century. It was spurred by the works of Russell Kirk and William F. Buckley , Jr., especially Kirk’s The Conservative Mind , which appeared in 1953. His his incisive criticisms of liberalism, socialism, and the welfare state provided powerful arguments that later conservatives would employ. Yet Kirk and many of his followers professed a worldview that differed significantly from that of the new conservatives who would follow them in the late Twentieth century. Kirk’s thought was anchored in a flinty traditionalism that valued premodern virtues and questioned modernity’s materialism, excessive individualism, and equalitarian tendencies. There was a certain resistance to new developments and ideas until they had been tested, shaken down, and become old and generally accepted. Kirk distrusted ideology and saw classical, laissez-faire liberalism as a modern ideology. Kirk shared with the new conservatives of the late 20th Century a strong discontent with the world as it was presently arranged, but their veneration of laissez faire economics, acceptance of materialism, and ideological bent were foreign to Kirk. Unlike the neoconservatives who would come to dominate his political party, Kirk knew that free markets were a means to certain ends and not the ends themselves. He had contempt for the term "individualist." For him, an ultimate goal was genuinely a humane society distrusted those who looked at society mainly from a first person perspective.


Young William F. Buckley, Jr., who founded the National Review in 1955, was much more inclined to embrace materialism and build his thought on the operation of the free market His goal was to build a unified conservative movement around free market thought, and by 1964, NR had 90,000 subscribers. In 1960, he founded Young Americans for Freedom, which would be the source of many conservative leaders. Buckley’s efforts and the work of Frederick von Hayek at the University of Chicago since 1950 contributed significantly to the subsequent revival of neoliberal thought The use of the word "liberal" in this sense is a reference to the classical liberalism of the Nineteenth Century, which was to form the basis for late Twentieth Century conservative economic and political thought. Their fundamental premise was that the economy thrives when government interference is minimized. Epistemological purists object that neo-liberalism and conservatives are mutually exclusive terms for many reasons, but the fact is that in everyday discussions, the revival of political conservatism is traced to the emergence of what is called neo-liberal thought. 1 It has been a long time since anyone who advances neo-liberal thought would accept that label. It becomes even more confusing because the people who most often advance it are the political neoconservatives, people who abandoned the left and became political conservatives. Moreover, the word liberal came to have such a bad reputation, that these people wanted avoid the use of it in any form.


Buckley’s outspoken libertarianism reflected more the thinking of 18th century materialists than the pre-Enlightenment heritage. However, the neoliberals’ thought relied on reconstructed classical liberalism, and in time Buckley’s pronouncements moved in that direction. Neoliberal economic philosophy was to be thoroughly materialistic and based on rational self-interest, which Kirk deplored. While Kirk distrusted anything that smacked of egalitarianism, the new conservatives built a mass following with a form of right-wing populism that denounced so-called elites and generated intense anger and even hatred of liberals . Theirs was a very ideological approach to politics, while Kirk’s was rational and somewhat eclectic.2


The revival of conservatism as a political force in the United States began in Barry Goldwater’s unsuccessful quest for the presidency in 1964. The Goldwater movement laid the foundation for the revival of conservatism and the growth of neoliberalism. Both gathered momentum in the 1970, due in part to deteriorating economic conditions. In the last third of the Twentieth Century, competition had begun to damage the position of the working class in Europe and the United States. Moreover, it made it more difficult for governments to fund social safety net programs and for industries to provide benefits they had promised unions through collective bargaining. These pressures fueled the revival of so-called market economics, essentially the revival of economic theories popular in the United States from the late Nineteenth Century through the 1920s. This is also called , in its political and economic manifestations, "neoliberalism," because it represents in many ways a return to the classical liberalism of the Nineteenth Century, which valued extreme individualism, dog-eat-dog economic practices, and little concern for those who fell by the wayside in life’s race. The neo-liberals claimed to believe in laissez-faire economics and were very critical of the accommodations conservatives had made to New Deal policies in earlier decades.

These economics were the forerunner of Reaganonomics. The neoliberals glorified competition as the supreme arbiter of economic success and much more, and in time this belief in a rather unrefined social Darwinism came to guide their foreign policy with the proclamation of the Bush Doctrine in 2001, a blunt assertion that the United States, due to its enormous power, had the right to do whatever it wanted in world affairs. It was a frank assertion that the US was committed to pursuing American supremacy .

They were also called laissez-faire conservatives, but the emphasis should be upon their rejection of acceptance of the core of the New Deal. For some, belief in laissez faire often carried over to moral matters and the relationship between the individual and the state. In time, however, their alliance with cultural and religious conservatives would require them to downplay these notions. Conservatives denounced the redistributionist policies that began with Franklin Roosevelt as immoral and planned to make them work in reverse. Their intellectual forebearers had founded the Liberty League in the 1930s. One of its chief goals was to fight tax increases because progressive taxation placed the heaviest burden on those with the greatest ability to pay taxes. 3 Their problem was that they were accurately perceived as a group of rich men bent on undoing Franklin Roosevelt’s New Deal. They wrapped themselves in patriotic rhetoric, but few missed seeing their true nature. The conservatives of the late Twentieth century did not repeat this error. Through their propagandists and think tanks they not only presented themselves as patriots and defenders of the values of ordinary Americans, they continually developed the theme that criticism of policies that benefitted the rich represented class warfare, which was a serious threat to American political institutions. tHEIR STRATEGY WAS SO EFFECTIVE THAT BY 2005, IT COULD BE ARGUED THAT A MAJORITY OF aMERICANS SHARED THEIR VIEWS. fOR THAT REASON MANY dEMOCRATS IN THE hOUSE AND SENATE FELT OBLIGED TO VOTE WITH REPUBLICANS ON MANY ISSUES.

Next to reducing taxes, the most important ingredients of the revived conservative gospel were opposition to economic regulations and a demand that taxes be lowered. It was argued that the regulations in the massive Federal Register drive up consumer prices and make producers, "unable to compete meaningfully against one another in the marketplace, compete instead federal favor." 4 Liberals and conservatives disagreed over how much regulation was necessary. Though not credited with this belief, the fact was that liberals too believed in the free market, they simply thought it worked best when regulated. The reenergized conservatives wanted far less regulation, and some wanted none. When Congress deregulated the savings and loan industry, Ronald Reagan spoke for many when he said ,"All in all, I think we’ve hit the jackpot." The sweeping deregulation led to massive misconduct in the industry and to a huge federal bail-out. Nevertheless, these3s events did not diminish enthusiasm for deregulation. 5

The economy should be self-regulating it was claimed, even though this meant that it would be regulated by large corporate interests to the disadvantage of consumers, laborers, and consumers. It was argued that a self-regulating economy worked best when unions possessed little power. The American version of conservative economics assumed that economics was an exact science like physics and that the behavior of millions of people acting in the economy "could be reduced equations much like those that capture the laws of thermodynamics." No conservative would have said that in essence man was made for economic laws, but this was an inherent assumption. Its advocates overlooked the fact that economic statistics " are a slag heap of samples, interpolations, and just plain guesses…."

Market fundamentalists professed that increasing the minimum wage would always dampen entrepreneurial spirit, price the unskilled out of the labor market, and depress the economy. Even when careful studies demonstrated that increasing the minimum wage had none of these effects. They adhered to their version of economic orthodoxy. Conservative economics did demonstrate that beyond a certain point, guaranteed jobs, benefits, and wages, did retard economies, and most liberals, when pressed, had come to accept this as an empirical fact. The problem was that for most conservatives, market fundamentalism had become a matter of political doctrine rather than a useful tool for addressing human problems.6
Market fundamentalism, a resuscitated version of the laissez -faire economics of the Nineteenth Century, is based on the premises that economic actors have perfect information and that competition exists. When markets are incomplete and information is not good, the model does not work well.

Many traced the causes of the Great Depression substantially to forces that grew out of insufficient information and competition. Historical experience has demonstrated that a certain amount of government regulation has been needed to compensate for market failures and sustain economic growth. Among them were administered prices, underconsumption, and overaccumulation. In the United States, the latter was manifested by large amounts of money not productively invested by the wealthy. Administered prices usually occurred when there was excessive concentrations of market power, and unregulated competition usually contributed to this. Many industrialized countries rejected so-called free market policies because markets in the Twentieth Century could not be free, and their malfunctions created great inequities and social problems. Rather, efforts were turned toward finding out how much government intervention was need to make the markets function well and remedy economic inequities and social problems. It was these government interventions that the market fundamentalists insist upon reducing or eliminating. The market fundamentalists have incorporated into their creed a deep commitment to "trickle-down economics." It is the belief that by benefitting those at the top of society, everyone else will eventually benefit. The reverse side of position is that if someone must bear economic pain for the benefit of society, it is those at the bottom. Of late, the justification for trickle-down economics is that "a rising tide lifts all boats." When "trickle-down" economics were applied in Nineteenth Century Europe, pauperism grew. Likewise, when this approach was deliberately applied in the 1980s in the United States the economy grew but those at the bottom experiences a sharp decline in income. Those who believe in trickle-down economics believe in it as though it were a religious faith. There is almost no data to support it. 7
It was postulated that as economies mature economic inequalities diminish and adverse environmental consequences of production also declines. Environmental problems will be resolved as these economies toward a service orientation, which would require the use of fewer natural resources. It is also hypothesized that tat free economies offer strong incentives for the invention of technologies that would waste fewer resources and do less harm to the environment .Hence, these ameliorating technologies would be potentially highly profitable.8

High taxes, it was argued, prevented very creative individuals from producing wealth, and these taxes often resulted in transferring income to the undeserving poor. The tax cuts the conservatives offered uniformly were designed to benefit the rich. They complained that the rich paid too much in taxes. In the late Twentieth Century, the share of income taxes paid by the riches generally increased while the percentage of income taxes paid by the lower half of taxpayers decreased . In 2001, the top 1% of taxpayers earned above $372,000 per year and paid 25% of all taxes. People-possessing assets worth $1 million or more was hardly confined to this 1%. Those earning $72,000 or more constituted 20% of taxpayers and were paying 68% of taxes. Conservatives show little interest in the question of comparative ability to pay taxes as most of them came to reject the principle of progressive taxation. They were also alarmed that non-defense spending increased dramatically since 38% in 1955 to 83% in 2001, largely due to the growth of entitlement programs. They argued that the high taxes paid by the rich penalized success and that the increase of entitlements eroded the character of the recipients and corrupted the political process because recipients were inclined to vote to keep the benefits coming. 9

In 2002 R. Glenn Hubbard, George W. Bush’s chief economic advisor, admitted that Republican tax cuts were designed to benefit the rich at the expense of the rest of society. Moreover, he claimed that the rest of society should pay more in taxes. Hubbard believed that a modest loss of tax revenue would encourage savings, which , in turn, would be invested in productive economic facilities and accelerate technological change. 10 The political calculus associated with the tax cuts dictates that the taxes of ordinary families not be reduced appreciably because it is important that they continue to resent taxation, not think of government as a friend, and remain potential recruits for the new majority Republican theorists sought to build. Indeed, The Wall Street Journal argued that raising the taxes of these "lucky duckies," whose tax rate is relatively low, would be political beneficial by getting their "blood boiling with tax rage."11
Republicans reasoned that tax cuts favoring the rich facilitate investment in productive facilities, but another reason for taking this position was a belief that the wealthy pay too large a proportion of federal income tax revenue. In the late Twentieth Century, the share of taxes paid by the riches generally increased while that paid by the lower half of tax payers decreased. This development was matched by growing assets and income gaps between rich and poor.

In 2001, the top 1% of tax payers earned above $372,000 per year and paid 25% of all taxes. People possessing assets worth $1 million or more was hardly confined to this 1%. Those earning $72,000 or more constituted 20% of taxpayers and were paying 68% of taxes. Conservatives showed little interest in the question of comparative ability to pay taxes as most of them came to reject the principle of progressive taxation. They were also alarmed that non-defense spending increased dramatically since 38% in 1955 to 83% in 2001, largely due to the growth of entitlement programs. They argued that the high taxes paid by the rich penalized success and that the increase of entitlements eroded the character of the recipients and corrupted the political process because recipients were inclined to vote to keep the benefits coming. 12
By 2002, conservative rhetoric on the subject of taxes sometimes seemed almost hysterical. When the Senate in 2002 briefly considered a one-time capital gains tax on people who give up their citizenship for tax purposes, Senator Phil Gramm claimed the proposal came "right out of Nazi Germany." When the Senate considered means of preventing corporations from rechartering themselves abroad for tax purposes, Daniel Mitchell, head of the Heritage Foundation, called it the "Dred Scott tax bill," calling it a slave tax.13


When the George W. Bush administration prepared its 2003 tax cuts, it instructed the Treasury Department to prepare data demonstrating why low-income workers should carry more of the tax burden.14 Until then, Republicans were unwilling to address the question of shifting more of the tax burden to ordinary people in order to give the rich tax relief. These tax cuts are designed to end progressive taxation and what is considered the unjust redistribution of income that they facilitate. The Bush tax cuts were more designed to starve government than to reduce marginal rates. As Grover Norquist, a leading conservative theorist, said, "The goal is reducing the size and scope of government by draining its lifeblood." The context was different when Ronald Reagan cut taxes. Marginal rates were high then, and his primary purpose was to slash them. A secondary goal was "starving the beast," in the words of his budget director David Stockman.15 In the last analysis, the goal of conservatives like Norquist is to eliminate the graduated income tax and replace it with a single rate flat tax or a tax on consumption. They claim that either approach will unleash the forces of economic growth.16

Assisting the poor was seen as counterproductive because it dissuaded them from becoming industrious. It was claimed that they interfered with the free operation of market forces in creating wealth and spreading prosperity. Representative Dick Armey wrote, "Congress…had spent the past sixty years constructing a state of public dependency." Armey and other neoliberals saw the Democratic Party as the "Big Government Coalition," that retained its power through a variety of handouts to dependent groups. This tougher attitude toward the poor was consistent with a stedady decline in voluntary benevolence."

However, after the GOP became the governing party in 2001, it quickly lost much credibility as the party committed to small government. Even leaving out consequences of homeland security efforts, government expanded at a dizzying pace under George W. Bush. Some Republicans were critical of this development, but their comments were somewhat muted and there were no threats of rebellion within the party. One of the most remarkable thing about the George W. Bush Republicans was that they came to embrace big government, suggesting that "big central government would look a whole lot better to Republicans when they got control of it." Once in power, their friendliness to federalism diminished as their central government interfered with state efforts to experiment with pollution control, deal with some health issues, and address the problem of obtaining lower cost prescription drugs.

Republicans saw liberal efforts to alleviate the problems of poverty as useless attempts to solve problems by throwing money at them. Indeed, they claimed that the Aid for Dependent Children program hastened the moral collapse of America by encouraging single parent families among the poor. Conservative attacks on liberal efforts to alleviate the suffering of the poor were relentless and played a central role in partly defining liberals as foolish people who had too much compassion and too little common sense. They were especially successfully in attacking Lyndon Johnson’s War on Poverty, claiming that "liberals fought poverty, and poverty won." Growing acceptance of the conservative gospel was reflected in more than election results. Over time, the public commitment to assist the poor declined sharply. By 2003, the nation’s attitude toward the poor and hungry had shifted dramatically. Very few members of Congress then thought it was politically safe to champion the hungry. In that year, less than 20% of New York City’s home-delivered meals program was funded by federal dollars. In 1983, the U.S. government’s share was 80%. By 2003, the nation’s attitude toward the poor and hungry had shifted dramatically. Very few members of Congress then thought it was politically safe to champion the hungry. In that year, less than 20% of New York City’s home-delivered meals program was funded by federal dollars. In 1983, the U.S. government’s share was 80%.17
The anti-tax thrust of conservative thought found a growing receptive audience after it became apparent that it was becoming increasingly difficult for ordinary people to make ends meet. In the 1950s, many came to see the United States as potentially a permanently affluent society. There would be modest downturns, but overall Americans could afford to compassionately address social problems by wisely spending part of tax money generated by annual economic growth. By the late 1970s, this vision had faded, and a decade later economic insecurity characterized much of the middle class. In these new circumstances, people were less willing to pay taxes to help others, and they sought scapegoats for the increasing economic insecurity they faced.

The new conservatives believe that poverty cannot be abolished and that political liberalism breeds statism. Market fundamentalism or neoliberalism is opposed to government spending as a means of stimulating the economy, and it recommends tax cuts for individuals and corporations to promote economic growth. It supports free trade, opposes welfare spending, regulation of business, and vigorous enforcement of labor law. Neoliberals believe that welfare does not work and does not encourage people to take charge of their lives. It "consists of the weary paying of protection money " to encourage the unhappy and poor not to harass the prosperous. 18

The arguments of the revitalized conservatives appealed to people who were experiencing more and more difficulty sustaining their standard of living. From 1970 to 1997, the percentage of people earning from $20,000 to $75,000 a year diminished from 57% to 47% of the population. Almost six out of ten whites surveyed in 1995 said they were unwilling to pay more taxes to help poor minority people. A former Vista volunteer spoke for the majority in saying "I can’t afford to support illegitimate babies, women with five abortions, and poor people who don’t want to work. Right-wing talk show hosts learned to capitalize upon this resentment of the poor. .Conservative talk show host Rush Limbaugh called people on welfare the "dependency class, " and New York host Bob Grant called the city’s African American mayor, David Dinkins "the men’s room attendant"19

Many market fundamentalists have incorporated a "supply-side" orientation that defies classical theory and essentially is the opposite of Jean-Baptiste Say’s Law, which states that supply is finite and cannot outrun demand, which is infinite. Jean-Baptiste Say claimed "Supply creates its own demand." Production keeps the economy going and generates consumer demand. Put the products on the shelf, and people will buy them. Supply-side economics was based on the work of Arthur Laffer and was publicized on the editorial pages of the Wall Street Journal since 1974.. Laffer had little influence on professional economists, but had a profound impact upon neoconservative politicians and writers. The basic idea was simple: government revenues were supposed to increase as taxes were lowered. The supply-siders argue that they can effectively combat stagnation by stimulating demand. They advocate accomplishing this by making funds available to producers to increase output. This will, in turn, stimulate demand. George Gilder’s Wealth and Poverty (1981). According to George Gilder in Wealth and Poverty (1981) , supply side economics were the answer to all the nation’s economic problems. "Supply creates its own demand….," and the entrepreneurs are best at jobs. To encourage them to create jobs, the money supply must be increased and taxes reduced. Thus, "To help the poor and middle classes, one must cut the taxes of the rich." By pumping more money into the economy, new jobs would be created and the goods produced would be snapped up by people with money in their hands due to increased employment.

Government was blamed as the creator of inflation. The supply- siders practiced a form of Social Darwinism, seeing the rich as the best and most productive products of social evolution and showing little interest in those at the bottom of the social heap, those who failed to adapt and thrive. They opposed the minimum wage, claiming it would prevent small employers from adding to the payroll. At base, they thought people should have enough initiative to move beyond minimum wage jobs. Their arguments were successful in for two decades in reducing the buying power of the minimum wage as effort adjust it for inflation were usually fought off. By keeping the minimum wage lower, they were able to slow the increase of wages in general. 20

Followers of John Maynard Keynes believe that it is more important to stimulate demand by seeing that the mass of consumers have the ability to consume more goods. The supply-siders saw the Keynesian approach as inefficient because the poor and ordinary people spend most of their money on basic commodities and do not save significant amounts in banks for large purchases. For these reasons, they insist that tax cuts must be designed to benefit the wealthy, who, they claim will, directly or indirectly, invest it in more productive capacity. Unlike the neo-classical economists, they are not greatly concerned about balanced budgets or deficits. However, they insist that their approach will eventually generate much more tax income and generate surpluses. In the Reagan years, many Republicans who had voted for supply-side tax cuts were greatly alarmed by the resulting deficits and tried to correct them. By the time of the second Bush administration, there was little evidence that any significant number of supply-siders worried about deficits. Much of the prosperity of the later Reagan years was due to massive spending on the military ( military Keynesianism).21 By then, the two political parties appeared to have reversed positions on the subject of deficits. Supply side economics has had few backers in academic ranks, and it may well be that some of the politicians who adopted it , with its naive optimism, simply needed theoretical cover for their plans to shrink government by depriving it of funds. On the other hand, the neoconservatives, who became the most dedicated advocates of neoliberal economics, may talk about shrinking government but actually were committed to an activist government. The parts of government they would shrink were those that served Democratic constituencies. Indeed, they were perfectly capable of expanding government when they thought it would garner votes, and they did so in 2004 by adding prescription coverage to medicare. The Republicans of the 1950s were concerned with curbing spending and reducing deficits. By 2004, these concerns were low priorities. When the Republican House passed a 2005 budget that continued unbridled spending and an enormous deficit, only nine Republicans voted against it. 22

In the Clinton years, the Democrats adopted Treasury Secretary David Rubin’s Crowding out Theory and believed that this accounted for the great success of Clinton’s economic policies. At a simple level, it was held that large deficits made it harder for businesses to borrow money ad acceptable interest rates. Short term interest rates may not always be adversely effected by large government borrowing, but the crucial long term rates are. Republicans, on the other hand, came to see the Clinton era prosperity as a mere "blip" and to maintain that deficits did not injure the economy. A clear advantage of Rubinomics was that it reassured markets that the federal government was attempting to adhere to fiscal discipline.

Moderates and many conservative Republicans ridiculed Ronald Reagan’s supply side economics, but this approach to economics becamed fixed Republican doctrine by the time the second Bush assumed the presidency. . Supply siders believe that supply creates its own market; it is the opposite of demand side. Democrats and even many Republicans had believed that the lesson of the Great Depression was that workers needed enough money to keep the economy humming through consumption. George H.W. Bush called it "Voodoo economics," and John Anderson saw it as "economics with mirrors," and Senator Howard Baker likened it to a "riverboat gamble." Nevertheless, it became the Republican cannon under Reagan and the cornerstone of George W. Bush’s domestic programs. Belief in supply-side economics has more than a bit of a religious quality to it, and supply-siders are known to direct their anger at fellow Republicans who do not endorse new form of Republican economic orthodoxy. Peter G. Peterson, an old-style Republican who long served the party, complained that his colleagues had come to see deficits as "a sort of fiscal wonder drug" and reminded his readers that the tax cuts of the 1980s boosted the debt "from 26% to 42% of G.D.P." By the second Bush administration, Republicans craft tax cuts with "sunset provisions" so that revenue losses would appear to be minimized. Of course, the plan was to repeal the sunset clauses later. In late 2002, George W. Bush appointed John Snow Secretary of the Treasury and Stephen Friedman as chief economic advisor. Both were denounced for "deficit phobia" and not being "one of us" by supply side true believers. The appointment was a shrewd political move as the new appointees were placed in the position of having to sell a supply-side tax reduction program to some who doubted its wisdom.23 The ridicule of "deficit phobias" signaled a new position on deficits. In his first inaugural address, Ronald Reagan said that nations and individuals can "live beyond our means, but only for a limited period of time." When his policies created enormous deficits, Republicans found various ways of blaming them on Democrats or minimizing their size. As late as the speakership of Newt Gingrich, Republicans were pressing for a balanced budget amendment. 24
Related to supply-side economics is the concept of the wealth effect developed by Michael Palumbo. This Federal Reserve Board economist claimed that the great stock market boom of the 1990s created a boom fueled by consumer spending. He pointed out that the increased spending and saving was done by the wealthiest households, which were benefiting by great increases in stock values. Polumbo argues that increasing spending by low income people is far less effective. His bottom line is that by stimulating the rise in stock market prices the economy will also be substantially boosted. This theory underpinned George W. Bush’s call to end taxes on dividends. 25

Market fundamentalism’s advocates preferred the term free market economics, but the word "free" is often not warranted. Most versions of market liberalism did not oppose various forms of corporate welfare and the continuation of some important tariff barriers. Nor did they address the problems of monopolistic and oligopolistic power, which made markets unfree. Some Republicans addressed these matters in the 1970s and a few, such as Kevin Phillips and Pat Buchanan, have raised these concerns in recent years. Some market fundamentalists oppose agricultural subsidies that largely benefit huge agribusiness corporations. However, there is concern about the many ways government assists business. For example, the Department of Defense funds a great deal of industrial research and development, playing in some ways the same role as Japan’s Ministry of International Trade and Industry.26 Similarly, the Star Wars programs were largely about subsidizing the development of high technology for the use of American industries. 27Advocates of the so-called free market seldom complain about airline subsidies, corporate bailouts, export subsidies, or the use of the CIA for industrial espionage. Some market fundamentalists oppose agricultural subsidies that largely benefit huge agribusiness corporations. Some market fundamentalists have even expressed concern about the ways government assists business. However, the great majority of them show no concerns about the various ways government assists the private sector.

Conditions in the late Twentieth Century were right for a revival laissez-faire economics and its related political doctrines. Changes in the global economy generated conditions conducive to the resurgence of conservatism in the late 20th century. Corporate profits began to lag after 1965, and American began to experience intense foreign competition. The squeeze on American corporate profits was resulting in attacks on employee wages and benefits as more foreign goods entered the American market.28 The loss of good-paying industrialized jobs had begun well before the 1970s , as had increased foreign competition. The City of Chicago lost 59% of its industrial jobs between 1947 and 1984. 29 After 1973, the substantial rates of growth would be rare, leaving nothing for rerdistributionist policies and less for sustaining welfare state policies.30 The high inflation and weak economy during the Carter years also led many to conclude that liberal economics had failed and that the time had come to try Republican remedies.31 Given these circumstances, many accepted conservative arguments that American industries could not prosper unless workers benefits were reduced and corporate taxes were reduced. To make America, a lean, tough competitor, many accepted arguments that the nation had to reduce the size of government and the safety net it provided. Environmental legislation and governmental regulations of business were seen as potential threats to maintaining jobs.
Thatcherism was the British form of neoliberalism. Both Thatcherism and the ideology of the new American conservatives exploited deeply rooted historical feelings and identities and expertly played on the anxieties, fears, and threatened identities of many people. The new conservatives’ ideology was simplistic and based on a great deal of false information, but it was disseminated with such skill that it eventually dominated the terms of discourse. It offered people an explanation for unwanted changes in American life, identified objects for anger and rage, and promised change. It also provided people with reasons to feel good at the expense of others. They could see themselves as exemplars of the traditional American work ethic and as far superior to those who living off of welfare.

Writing in 1992, William Greider accurately assessed the situation: "The contemporary Republican party seems brilliantly suited to the modern age, for it has perfected the art of maintaining political power in the midst of democratic decay."32 Distrust of government had grown to the extent that a pivotal faction of the Democratic Party, the New Democrats, kept themselves in office by distancing themselves from the old liberalism of Roosevelt and Lyndon Johnson and agreeing with Republicans on welfare and much economic policy. There is no simple explanation for the decline of liberalism. In The Strange Death of American Liberalism, Professor H.W. Brands argues that Americans traditionally distrusted government and only accepted liberalism when then needed a powerful government to deal successfully with the Cold War. He writes, "It is not too much to say that without the Cold War, liberals would never have achieved the success they did." The Vietnam war and the Watergate scandal bred deep disillusionment with government and a rejection of liberalism and a reversion to a traditional skepticism about what government can accomplish. 33 Modern liberalism took shape early in the Twentieth Century, when progressives began to argue about whether active government was necessary to address contemporary problems, The debate was settled in favor of positive government in the New Deal. There is much to recommend Brands’ analysis as a means of explain liberalism’s long dominance, and it helps explain its sharp decline. However, other factors were involved in end of liberal dominance. For many, the Vietnam war underscored the bankruptcy of liberalism. Likewise, the implosion of the Cold War paradigm prepared the way for conservative ascendancy, but many factors explain how this came about and why a mutant form of conservatism would replace liberalism as the political outlook that claimed the most adherents by the turn of the century.

The program offered by neoliberals in the United States was a form of radical bourgeois capitalism, but it is doubtful that large numbers of people acquiesced because they saw this as the only way to for the nation to compete in the modern world. Conservative economics was an ideology rather than the result of empirical, scientific analysis. Commenting on this approach to economics, John Kenneth Galbraith said, "Conservatives need to be warned that ideology can be a heavy blanket over thought."34 Despite the flaws that could be ascribed to the thought of the conservative revival, there could be little doubt that it sprung from careful intellectual effort, and, the neoconservatives– converts to conservatism and market economics– would become very effective propagandists for this outlook. However, conservatism only became the dominant political outlook after attention focused more on cultural than economic matters. Most secular conservatives were concerned about the damage deteriorating moral values could do to society; but their’s was metaphysical at root. In grew out of concern for first principles. Threats to traditional morality were to rally religious conservatives to Republican standards; and this was to make the Republicans the majority party and conservatism the dominant political outlook. The secular conservatives and religious conservatives had very different temperaments and political instincts, but they would succeed in fashioning an effective political alliance.